CIA SANEAMENTO BASICO DE-ADR (NYSE:SBS) Fits CAN SLIM Criteria with Strong Earnings Growth and Market Leadership

The CAN SLIM investment strategy, created by William O'Neil, blends fundamental and technical analysis to spot high-growth stocks with solid momentum. This approach targets companies showing faster earnings and sales growth, significant institutional backing, and industry leadership. Stocks matching these conditions frequently display better performance compared to the overall market and often do well in rising markets.

Companhia de Saneamento Basico do Estado de Sao Paulo SABESP (NYSE:SBS), a Brazilian water and sewage utility, seems to align with multiple CAN SLIM requirements based on its latest financial results and technical patterns.

How SBS Fits CAN SLIM Criteria

• C – Current Earnings & Sales Growth
  SBS posted a 76.27% year-over-year EPS increase and 32.83% revenue rise in its latest quarter, surpassing the CAN SLIM benchmark of at least 20-25% growth. This improvement in earnings and sales matches the strategy’s focus on firms with growing financial health.

• A – Annual Earnings Growth
  In the last three years, SBS has achieved an average yearly EPS growth of 60.79%, far exceeding the 25% minimum suggested by O’Neil. This steady growth indicates the company’s strong operational performance.

• N – New Highs & Industry Leadership
  The stock is now close to a 52-week peak, a favorable sign under CAN SLIM, which prefers stocks breaking out of consolidation periods. Moreover, SBS beats 84% of its competitors in the Water Utilities sector, confirming its leading role.

• S – Supply & Demand Dynamics
  SBS has a debt-to-equity ratio of 0.65, under the CAN SLIM-recommended limit of 2, signaling reasonable debt levels. Recent trading activity has also been higher, pointing to growing institutional attention.

• L – Relative Strength
  With a relative strength score of 80.44, SBS performs better than over 80% of the market, a crucial feature for CAN SLIM picks. Strong relative performance often leads to further gains.

• I – Institutional Sponsorship
  Institutional ownership is at 40.17%, below the 85% maximum advised by CAN SLIM. This allows for more institutional buying, which could push the stock up.

• M – Market Direction
  The broader market (S&P 500) continues in an upward trend, both short and long term, favoring CAN SLIM-style investments.

Technical & Fundamental Overview

SBS has a perfect technical score of 10/10, with upward trends in both short- and long-term charts. The stock has demonstrated steady strength, recently reaching new highs with higher-than-average volume—a positive indicator.

Fundamentally, SBS scores a rating of 6/10, with strong results for profitability (ROE of 26.66%) and valuation (P/E of 7.58, much lower than industry and S&P 500 averages). However, future EPS growth is projected to dip slightly (-5.41%), a factor investors should watch.

For more on the technical details, check the full technical analysis report. For fundamental data, see the complete fundamental analysis.

Finding Other CAN SLIM Picks

SBS is one of many stocks identified through our CAN SLIM screening method. Investors searching for more high-growth, high-momentum stocks can review additional options using our predefined CAN SLIM screener.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a financial advisor before making decisions.